Academic journal article Business: Theory and Practice

An Empirical Competence-Capability Model of Supply Chain Innovation

Academic journal article Business: Theory and Practice

An Empirical Competence-Capability Model of Supply Chain Innovation

Article excerpt

Introduction

Supply chain innovation is a must therefore for the following reasons: (a) for gaining competitive edge in the market (b) for managing the different types of risks prevailing in the supply chain (Wagner, Bode 2006) and (c) for meeting proactively the different forms of uncertainties in the adjoining environment (Fawcett, Waller 2011). The main aim of supply chains recently is to consolidate their footing through constant innovation in products, services and strategies of serving existing and newer markets profitably. Hence, the success of global manufacturing activities often depends upon a manufacturing firm's ability to innovate and adapt its supply chain to dynamic changes in customer needs and preferences. Now this capability to innovate for a supply chain is enhanced through efficient management of supply and demand side activities for the focal manufacturing firm. These supply and demand side competences are two fundamental building blocks of supply chain management (Blome et al. 2013) and would definitely contribute to developing a firm's supply chain innovation. While the former is defined as a firm's proficiency in managing its upstream (supply-related) activities (e.g. supplier and production management), the latter is defined as the firm's ability to effectively manage downstream (demand-related) aspects (e.g. demand and distribution management) (Blome et al. 2013; Handfield et al. 2004). However, their role in developing supply chain innovation was never explored. Using the tenets of resource-based view complemented with the dynamic capabilities perspective, the current study theorizes and explores the importance of both the competence for a firm's supply chain innovation.

And second, the study explores the role of process compliance as moderating the linkage between supply and demand side competences with supply chain innovation. Process compliance in the current context is defined as appropriate execution and adherence to supply chain management principles and procedures (Blome et al. 2013). The rationale for this presumption rests on the understanding that suitable infrastructure is required for the associated competence to be appropriate in achieving their goals in the supply chain management. Hence the aims:

(1) To explore the influences of supply and demand side competences on supply chain innovation.

(2) To explore the influence of process compliance on the linkage between the above competencies and supply chain innovation.

(3) To explore the influence of supply chain innovation on operational and relational performance for the focal firm.

1. Theoretical background

1.1. Supply chain innovation

Supply chain innovation and logistics innovation have been dealt interchangeably. However, the literature on supply chain innovation is highly fragmented (Grawe 2009) and multidisciplinary investigation has taken place (Flint et al. 2005; Chapman et al. 2003). Afuah (1998) defined innovation as: "a process of turning opportunity into new ideas and putting these into widely used practice. Innovation facilitates create new technical skills and knowledge that can help develop new products and/or services for customers". The literature on supply chain innovation has just started evolving. Wagner and Bode (2008) proposed a model of logistics innovation consisting of several related activities like internal search and development, external search and development, investment in infrastructure and capital goods, acquisition of knowledge and training and education etc. that can lead to innovations in logistics. Supply chain innovation also indicates discovering and implementing new technologies with better efficiency and effectiveness (Bello et al. 2004; Rogers 1995). More recently, Lee et al. (2011) in the Korean healthcare sector observed that supply chain innovation is necessary to improve the organizational performance. Arlbjorn and Paulraj (2013) reviewed the literature on innovations in supply chains and argued numerous research avenues. …

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